Does Analyst Expectation Deficit Stimulate Strategic Change?——Evidence from China's Listed Manufacturing Companies

Abstract

Abstract:

Does analyst expectation deficit stimulate strategic change? To answer this question, this study investigates the impact of analyst expectation deficit on a firm's strategic change by considering the moderating effect of CEO's tenure expectancy and the combined effects of CEO's tenure expectancy and CEO shareholdings. Hypotheses are tested through the manufacturing companies listed in China from 2008 to 2015. The findings show that:when an enterprise fails to reach the performance target expected by the analyst, analyst expectation deficit will play a positive role in strategic change; when CEO's tenure expectancy increases, the positive influence of analyst expectation deficit in firm's strategic change will strengthen; when CEO shareholdings increase, the facilitating effect of CEO's tenure expectancy on the relationship between analyst expectation deficit and strategic change will be enhanced. The conclusion deepens the understanding of strategic change from an external perspective.

Key words: analyst expectation deficit, CEO's tenure expectancy, CEO shareholdings, strategic change

Zhong Xi, Song Tiebo, Chen Weihong, Tang Yuanyou. Does Analyst Expectation Deficit Stimulate Strategic Change?——Evidence from China's Listed Manufacturing Companies[J]. , 2020, 32(2): 266-277.

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